Ad Spend from Long-Term Advertisers Driving Instagram’s Growth

Social media app Instagram saw a 120% increase in ad spend year-on-year during the fourth quarter of 2018 as it continues to be a major driver of social advertising growth, a report by Kenshoo found

Instagram Stories grew faster than Instagram feeds, with Stories ads now making up 10% of all Instagram spend, up from 8% in the previous quarter. What’s more, brands that advertise on Facebook and Instagram rarely spend more than 50-60% of their total budget on Instagram.

A big part of this growth was down to existing Instagram advertisers increasing their ad spend on the platform. Advertisers who have been using Instagram Ads since 2017 spent four times more on the platform compared to those who only started spending on Instagram Ads in 2018. The report is based on findings from more than 3,000 advertiser and agency accounts across 20 vertical industries and over 60 countries.

Another report from Merkle found that Instagram continues to drive significant revenue growth for Facebook and for the median advertiser spending on both Facebook and Instagram, Instagram investment rose to 27% that of Facebook in Q4 2018, triple that 9% in Q1. Marin Software's Q4 2018 report found that Instagram received 18% of total Facebook spend, with 34% of that spend allocated to Instagram Stories.

It seems that ad clicks and spend are almost entirely coming from mobile devices as the social media giant continues to outpace most other digital marketing platforms in terms of mobile dependence.

Although Instagram is a leading platform, many advertisers still consider it a fairly new channel and need to take time to learn before they spend heavily on the platform. Instagram continues to be a key force in 2019, so advertisers need to “be on top of new formats and strategically test them out earlier in the year when costs are lower and the risk is less so you can go aggressive when it matters most,” read the Kenshoo report.